LIRR Unions Gradually Putting The Railroad Out Of Business

Last week the big news was that the Long Island Railroad workers were going to begin a strike over the weekend.  Then, as reported everywhere in the press, at the last minute Governor Cuomo swept in and "brought the two sides together."   A deal was reached.  Monday morning the trains were running, with a new deal, including raises of 17% over 6 1/2 years.  This deal bridged the gap between previous offers of 17% over 7 years from the railroad, and 17% over 6 years from the union.  What statesmanship!

As usual, all the reporting was about the drama of the threatened strike and the relief of the settlement.  Here's an example from Andrew Tangel in the Wall Street Journal on July 17:

"Everybody seems to have won something, and the governor won the most because he brought about the settlement," said Ken Margolies, who teaches labor relations at the Worker Institute at Cornell University.  Riders were relieved.  "I'm very happy," said Jerry Noble, 61, a sales representative from Suffolk County and a LIRR commuter who said he would have had to drive to Queens and then take a subway to work if a strike had shut down the railroad.  It wasn't immediately clear how much the agreement might cost the MTA in added labor expenses.

And as usual, they miss everything important.  The big story about the LIRR is the pitifully low productivity of its labor.   Farebox revenue pays only about 35% of operating costs per MTA 2013 data here, and undoubtedly that ratio is about to go down with the new contract.  This is a considerably lower ratio than even on the New York MTA's other main entities, the New York City subway and the Metro-North railroad.  Why?  I can't find any real information about this in any major press stories.  But then there's a site called The Long Island Railroad Today, run by a guy named Patrick O'Hara.   There, they actually do some real digging.

Back in April, and also last October,  O'Hara did in-depth stories on some of the LIRR work rules and how they affect the operations and costs of the railroad.  You really need to read some of this stuff to believe it.  I suggest reading both articles in full.  Here are some excerpts from the October article:

"Co-mingling" is probably one of the most blatant ones.  As per a rule that has been on the books since the 1960's, if an engineer operates both diesel and electric equipment during the same shift, he or she is entitled to an entire extra day's pay.  So if an engineer that starts out on an electric run moves a diesel, even for a couple of feet, they get an entire extra day's worth of pay.  As you might imagine, the penalty pay resulting from this rule can be pretty staggering at times when the railroad is recovering from service disruptions or when a piece of equipment malfunctions.  . . .

Another example of these union work rules is a rule that has been on the books since 1924 and involves a crew doing something outside their normal assignment.  If an engineer operates a train that is other than his or her regularly assigned train, then that engineer can get an additional straight-time hour of pay for every hour spent operating that train. . . .

"Rule 24," that racked up an immense amount of overtime for a handful of mechanics at the Richmond Hill facility, and only the Richmond Hill facility, stipulates that the LIRR is required to fill all vacant work slots at the LIRR's main diesel facility regardless of weather or not the manpower is actually needed.  This archaic rule means that if an employee were to be away on vacation or out sick, the LIRR would have to get someone else to fill his place, even if that person would have to be paid overtime.  There have been multiple instances where mechanics have worked shifts as long as 32 hours straight (all the while getting time and a half or double time for their troubles) all because the spots had to be filled.  This rule netted several mechanics who work at "Rich Man's Hill"  almost three times their base salary.

These articles go on and on about this stuff.  So did the new contract achieve any meaningful reforms in these rules?  Here is O'Hara's comment from his latest article on July 17:

With this contract, however, there was no mention of any changes whatsoever in things like work rules or overtime practices, so the MTA has missed a big opportunity to make the LIRR more streamlined and efficient.

How could they possibly have let this opportunity slip by?  To be fair to them, it looks like their position was completely undermined by a mediation panel appointed by President Obama that, unbelievably, took labor's side on all the work rule issues.  From a Long Island source called Anton News on January 9:

President Obama’s three appointees sided, big-time, with the LIRR’s unions, when releasing its 51-page, non-binding report on the LIRR’s ongoing labor dispute. . . .  The LIRR management team’s bid to get the presidential panel to endorse any of its proposed work-rule changes also went nowhere, such as those governing staffing requirements at Richmond Hill, or ones that would make it easier to reassign LIRR track workers to undertake bridge and building maintenance.

I would rate this as total incompetence on the part of Obama and Cuomo. 

Meanwhile, in other LIRR news, work continues on the big project to bring Long Island trains into Grand Central Terminal.   When they really got started on this project back in 2008, the budget was $7.2 billion and the projected completion date was February 2015.  In the latest report (April 2014) the budget is $9.3 billion and for revenue service dates they give a range of September 2021 to September 2023.  That's right, after six years of work, and all the tunneling long since finished, they are actually farther away from completion than they were the day they started.

At The Atlantic here, Benjamin Kabak comments on the ridiculously high costs of building new rail transportation infrastructure in New York.  Our costs are double and triple the costs of building comparable facilities in European and Asian cities.  Again, the problem is ridiculously low labor productivity, driven by work rules.

If these were private businesses, they would be out of business by now.  As public entities, they continue operating, but for how long?  Not too much longer, if the likes of Cuomo continue to play for today's headlines and ignore the productivity problem.